Why Renting Long Term is a Money Waster

By | January 5, 2011

Renting in the long term can actually prove to be a fickle endeavor that sucks the money out of your wallet. There are some very solid points on this subject matter, too.

A good way to think about renting a home is to compare it to that of leasing a car. When you sign a car lease you tender an amount due at signing, similar to the first and last month’s rent, and any security deposits with a rental home. At the end of the lease – for a car and a home – you don’t own any part of the secured asset. So in essence, you have paid for almost nothing to gain, except for using that asset, when you could have owned it and used it for about the same price.

You Don’t Get Any Tax Breaks
When you rent a home you don’t get any tax breaks. But when you purchase a home you get a few really sweet deductions. One popular deduction is that you can write off any interest you paid on the loan for that year, which can really add up.

Your Credit History is Not Affected
Renting homes is not reported to any of the credit bureaus. So it does nothing to improve your credit score. A mortgage, however, is a bank approved loan. Each timely payment is reflected on your credit score, and the home is a secured asset that you can borrow against as well; which can come in really handy for pricey things like college tuition costs for your kids.

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